Key highlights
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India ranks 2nd after the United States in terms of fintech funding raised in Q3 2024
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$778M funding secured in Q3 2024, a 66% increase from Q3 2023 and 165% growth from Q2 2024
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Since 2023, Q1 2023 has been the highest-funded quarter with overall funding of $1.16B followed by Q3 2024
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The top-performing sectors in Q3 2024 included Alternative Lending, Investment Tech, and Payments.
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Q3 2024 saw 2 startups attaining IPO status along with 1 company turning unicorn
Bengaluru, 15th October 2024:
Reiterating its status as a global leader, Tracxn, a well-known SaaS-based market intelligence platform, recently released its most current study on India’s FinTech startup environment. This confidential study offers thorough insights into the Indian Fintech ecosystem, encompassing startup funding, significant industry participants, and the primary trends influencing the market.
In Q3 2024, the Indian FinTech startup scene experienced a notable upsurge, obtaining $778 million in funding altogether. This represents a remarkable 165% increase from the $293 million raised in Q2 2024 and a 66% increase from the $471 million raised in Q3 2023. This astounding expansion highlights the rising investor confidence and the vibrant innovation that are propelling India’s FinTech scene.
In terms of total funding for the FinTech industry, India comes in fourth place, behind the US, China, and the UK, according to the research. India, on the other hand, jumped to second place in terms of funding in Q3 2024, indicating a notable recent expansion in the industry.Government initiatives like the JAM Trinity initiative, which links Aadhaar with bank accounts and mobile numbers, the promotion of digital payments through UPI—which processed over 14 billion transactions in May 2024—and the provision of INR 2,600 crore in incentives to support FinTech startups are all responsible for this growth.
Neha Singh, Co-Founder of Tracxn, commented on the findings, saying, “The revival of funding for the Indian FinTech sector marks a significant turning point in our trajectory towards becoming a worldwide FinTech hub.
The Indian FinTech ecosystem continues to show resilience and growth in Q3 2024. The quarter saw one company secure a $100M+ funding round, mirroring the same trend from Q3 2023. DMI Finance, a leading provider of consumer and SME loans, raised an impressive $334M in Q3 2024.
However, FinTech acquisitions in India declined, with only four acquisitions in Q3 2024, marking a 50% drop from the eight recorded in Q3 2023. Notably, payment solution company Ijeeva was acquired by FinFusion Solutions during this period.
The top-performing sectors in Q3 2024 included Alternative Lending, Investment Tech, and Payments. The Alternative Lending segment raised $517M, a 49% increase from $348M in Q3 2023 and a remarkable 199% growth from $173M in Q2 2024. Investment Tech secured $109M in Q3 2024, reflecting a 58% decline from $257M in Q3 2023, but a significant 356% surge from $23.9M in Q2 2024.
In Q3 2024, the Payments segment in India’s FinTech ecosystem secured a total of $93M in funding. However, some sectors lagged behind, with RegTech and Insurance IT emerging as the least-performing sectors this quarter. Notably, the RegTech segment saw no funding in Q3 2024, a stark contrast to the $238M raised in Q3 2023. Insurance IT also experienced a significant downturn, securing only $163K in Q3 2024 compared to $230M in the same period last year, reflecting a near 100% drop.
Despite these challenges, the Indian FinTech ecosystem saw positive milestones. In September 2024, lending management platform Moneyview achieved unicorn status, marking one of the major successes of the quarter. Additionally, two companies went public in Q3 2024, slightly down from the three IPOs in Q3 2023.
Peak XV Partners, Y Combinator, and Lets Venture emerged as the top investors in India’s FinTech space overall. At the Seed stage, Antler, Blume Ventures, and Venture Catalysts led the way as the most active investors in Q3 2024. For Early-stage investments, Elevation Capital, Accel, and Lightspeed Venture Partners stood out as the leading backers of emerging FinTech startups during the quarter.
The Indian government’s initiatives to promote digital payments and financial inclusion have played a pivotal role in fostering the growth of the fintech sector. Furthermore, the Reserve Bank of India’s (RBI) introduction of a self-regulatory framework aims to enhance industry stability, ensuring a conducive environment for sustainable growth and innovation within the financial technology landscape.
